Part VIII Supplemental

279CF5Effect of election under section 279A

1

This section applies where an election is made under section 279A by the taxpayer for the relevant loss to be treated as accruing in an earlier year in accordance with this section.

2

Where this section applies, the relevant loss shall be treated for the purposes of capital gains tax as if it were a loss accruing to the taxpayer in the earliest year which is an eligible year (the “first eligible year”), instead of in the year of the loss (but subject to, and in accordance with, the following provisions of this section).

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The amount of the relevant loss that falls to be deducted (in accordance with F8section 1(3)(a)) from the chargeable gains of the first eligible year is limited to the first year limit.

4

The first year limit is the amount calculated under F10section 1(3)F4... for the first eligible year.

The amount so found is the first year limit in a case where section 2(5)(aa) applies in relation to the first eligible year.

4A

For the purpose of making that calculation—

a

no account is to be taken of the relevant loss, but

b

the effect of any previous election under section 279A is to be taken into account.

5

As respects any later year before the year of the loss, the relevant loss (so far as not previously allowed as a deduction from chargeable gains accruing in any previous year) falls to be deducted in accordance with F12section 1(3)(b) only if that later year is an eligible year.

6

The amount of the relevant loss that falls to be deducted from chargeable gains of that later eligible year in accordance with F11section 1(3)(b) is limited to the amount (the “later year limit”) in respect of which the taxpayer would be chargeable to capital gains tax for that later year—

a

on the assumption in subsection (7) below,

b

taking account of any previous elections under section 279A, and

c

apart from F2amounts of chargeable gains treated as accruing in that later year by virtue of section 87F7, 87K, 87L or 89(2) (read, where appropriate, with F1section 1M).

7

The assumption is that no part of—

a

the relevant loss, or

b

any loss in respect of which an election under section 279A may be, but has not been, made,

falls to be deducted, in consequence of an election under section 279A, from any chargeable gains accruing to the taxpayer in that later eligible year.

The assumption falls to be made immediately after the making of the election in respect of the relevant loss.

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9

All such adjustments shall be made, whether by discharge or repayment of tax, the making of assessments or otherwise, as are required to give effect to the election under section 279A made by the taxpayer for the relevant loss to be treated as accruing in an earlier year in accordance with this section.

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